Technicals
US Dollar Rally to Continue This Week
Monday, 8 Feb 2010 11:57 EST at 11:57 by Jamie Saettele · Leave a Comment
Euro / US Dollar
The EURUSD has reached and dropped below the 100% extension of 15144-14216 (13650) but the larger trend remains extremely bearish against 14030, as a 3rd of a 3rd wave is considered underway from there. An objective is 13081 (161.8% extension). Any rallies should prove corrective. 13750-70 is resistance.
British Pound / US Dollar
The GBPUSD broke its diamond top last week and the trend is down against 16076. The rarity and reliability of the diamond pattern makes the break especially bearish. Given the 3rd of a 3rd count from 16464, the first Fibonacci confluence is not until 14714/62. Rallies should prove corrective and near term resistance is 15665 and 15729. Former resistance at 15356 may provide some this week.
Australian Dollar / US Dollar
The AUDUSD has broken below its December low and focus is now on 8400. If the decline from 9055 is a 3rd wave, then the decline should extend to at least 8400, which is the 161.8% extension of wave 1. Price should stay below 8774.
New Zealand Dollar / US Dollar
The next major support for the NZDUSD is not until 6600. Any rallies should prove corrective and 6977 is resistance in the event of a bounce. A Fibonacci confluence at 6365-6465 serves as the bearish objective.
US Dollar / Japanese Yen
The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may underway since the decline from 9380 is not impulsive either. 8832 and 8736 are potential supports. A rally above 9130 is required in order to turn bullish.
US Dollar / Canadian Dollar
Like the NZDUSD, the USDCAD completed an expanded flat last week (at 10543). A break above 10875 is expected this week as the pair is in a 3rd wave higher from 10543. A drop under 10642 cannot be ruled out. 10610 would be support.
US Dollar / Swiss Franc
Upside momentum in the USDCHF is strong. The pair is attempting a break above the top of a channel, which signals acceleration of the advance. 11026-11091 is a target area. Former resistance at 10647 is potential support.
Gold
The next major support for gold is not until 1005 (former breakout level). Even then, I expect that level to be taken out without much of a fight as the deflationary environment has returned with a vengeance. Short term resistance is defined by Fibonacci retracements from 1075 to 1094.
Light Crude
Crude is in a 3rd of a 3rd wave decline from 7804. Any rally should prove corrective. 7394 is resistance. Medium term targets (several weeks) are 6600 (100% extension) and 6426 (July low).
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary and trades at DailyFX Forex Stream. Send requests to receive his reports via email to jsaettele@dailyfx.com.
